Hyosung Heavy Industries Penalized by Fair Trade Commission for Paying Bribery at Hadogeumdae Level

Hyosung Heavy Industries was found to have shifted subcontract payments to other small businesses, resulting in corrective orders from the competition authorities.

On the 18th, the Korea Fair Trade Commission (KFTC) announced that it imposed corrective and future prohibition orders on Hyosung Heavy Industries for violating Article 12-2 of the Fair Trade Act (Prohibition of Unjust Demand for Economic Benefits).

Hyosung Heavy Industries commissioned the installation of an emergency generator for POSCO Pohang LNG power plant’s self-starting system and required the subcontractor to pay construction fees that Hyosung itself was supposed to pay to other contractors.

According to the KFTC investigation, from November 2021 to February 2022, Hyosung Heavy Industries instructed the subcontractor to pay a total of 38.5 million KRW in construction fees that it owed to two other contractors.

The KFTC explained, "Hyosung Heavy Industries’ act of instructing the subcontractor to pay construction fees for which it had no legal or contractual obligation was deemed an unfair practice of demanding economic benefits without justifiable reasons."

A KFTC official stated, "This action penalizes the principal contractor for shifting costs it should bear onto the subcontractor without justifiable reasons," adding, "It is significant in that it uncovered unfair practices that commonly occur as a custom at construction sites."